On Monday, April 3, the U.S. Justice Department agreed on a settlement with Activision Blizzard regarding the case against the company for its anti-competitive salary caps in Call of Duty and Overwatch 2 esports leagues. The lawsuit details several points about the competitive balance tax and salary limits, which were deemed unfair to the players.
In the lawsuit filed in the U.S. District Court in Washington, the department said that Activision Blizzard – which owns the Overwatch League and the Call of Duty League – and the independently owned teams imposed a tax which penalized the teams for paying esports players above a limit. The tax effectively served as a salary cap and limited the players' compensation for competing in the leagues.
Blizzard introduced the tax to prevent the wealthiest teams from signing the best players with financial incentives, hoping to introduce more balance to the esports competitions. But this backfired as the tax saw the wages of players decrease. Moreover, many teams decided to cut wages and ended up paying more for a single player, leading to an unfair situation for most of the esports players.
However, Activision Blizzard already removed the competitive tax balance for Call of Duty and Overwatch 2 teams at the end of 2021 in response to the Department of Justice first opening the investigation. But despite ending the practice, Blizzard doubled down and stated that the company believed the tax was lawful.
"We have always believed, and still believe, that the Competitive Balance Tax was lawful, and it did not have an adverse impact on player salaries", said Joe Christinat, spokesperson for Activision Blizzard.
Activision Blizzard eventually agreed to the settlement proposed by the Department of Justice, under which Activision must refrain from agreeing to or enforcing any rules that would put a cap or limits on the salaries of esports players in any professional esports league that Activision owns or controls. Before it goes into effect, the settlement must be approved by a federal judge.
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7. What does “opt-in” mean?
8. What else should I know about my privacy?
9. Other legal notices.
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Membership Agreement
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